Bitcoin returns to $40,000 mark as Binance caps withdrawals and leverage

·2-min read
Ljubljana, Slovenia - may 14 Bitcoin and alt coins cryptocurrency close up shoot
Bitcoin has headed higher in recent days off the back of rumours that Amazon would begin accepting it as well as a change in rules for platform Binance. Photo: Getty

Bitcoin prices climbed on Wednesday morning in London following a rough few months of trade, as cryptocurrency platform Binance said it would move to cap withdrawals and leverage.

Bitcoin (BTC-USD) was trading 7.2% higher against the dollar in early trade in London, flirting with the $40,000 (£28,954) mark.

The token is still some way off highs of $63,000 seen earlier this year, having suffered several knocks following regulatory pressure from a number of jurisdictions.

Bitcoin headed higher as Binance adjusted its rules.
Bitcoin headed higher as Binance adjusted its rules.

Ethereum (ETH-USD), the second largest cryptocurrency, was also trading up around 4%.

Binance said in a statement on its website that leverage levels of over 20x will not be available to futures accounts within the first 60 days of their opening.

"This follows the updates on 2021-07-19 (UTC) when leverage limit of a maximum of 20x was implemented for new accounts opened within 30 days," it said.

It also warned that futures trading carries substantial risks.

In a separate statement it said that daily withdrawal limits will be adjusted to 0.06 BTC for accounts that have completed only Basic Account Verification.

"This change is effective immediately for new account registrations and will be made effective for existing users in phases starting from 2021-08-04 00:00 AM (UTC) and completed by 2021-08-23 00:00 AM (UTC)."

Earlier in July, Binance stopped its customers from withdrawing British pounds and euros, amid a regulatory crackdown in the UK and issues with payments provider Clear Junction.

A statement on Clear Junction's website confirmed the move, citing a Financial Conduct Authority (FCA) ruling on the exchange.

At the time Binance said it was working to correct the problem and that it is committed to working with regulators to protect consumers.

Read more: Bitcoin pulls back from highs as Amazon denies payment rumours

In June, the FCA issued a warning to consumers that one of the world’s largest bitcoin (BTC-USD) exchanges is not permitted to undertake regulated activities in the UK.

Binance Markets was ordered to remove all advertising and financial promotions by 30 June.

Since then, banks including NatWest (NWG.L), Santander (SAN.MC) and Barclays (BARC.L) have opted to freeze out the trading platform.

Bitcoin has been volatile in recent days as rumours circulated that Amazon (AMZN) was considering accepting cryptocurrencies as payment. The company later denied this.

Amazon recently posted a job listing for a "Digital Currency and Blockchain Product Lead". London newspaper CityAM ran a story on Sunday night saying Amazon was poised to accept bitcoin, ethereum, Cardarno, and BitcoinCash.

Watch: What are the risks of investing in cryptocurrency?